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Where America's Richest Man Is Investing His Money

Bill Gates is best known for his Microsoft billions and the great philanthropic works that have followed. But something interesting has happened recently, and perhaps notably with this year’s Forbes 400 number-crunching, which puts him on our list up $6 billion with a total $66 billion to his name.

Gates’s net worth is now stunningly unrelated to the stock performance of the company he co-founded thirty-seven years ago.

Because of regular stock sales, Microsoft today makes up just one-fifth of Gates’s assets. At the time of last year’s Forbes 400, it was a quarter. The large remainder of his wealth is tied up in an investment entity called Cascade Investment LLC, which is managed out of Kirkland, Washington, a quick drive (with no traffic) from Microsoft’s Bellevue headquarters.

We don’t know much about Cascade except its largest investment positions, and in those, there is some insight about how America’s richest man is placing bets. And perhaps somewhat surprisingly, the king of tech favors more stodgy Warren Buffet-like deals for returns, or at least asset diversification.

This year, for example, Gates gobbled up shares of Republic Services, which operates 334 trash collection companies, 191 active landfills and 74 recycling facilities. Gates has for a while been a large shareholder in Republic Services, but this year increased his stake by 16% as the stock edged up just 3%, barely beating the even more paltry gains of rival Waste Management. Gates now holds roughly $2.2 billion worth of Republic Services stock.

He also upped his stake of auto-dealer network AutoNation by 17%, taking his total stake to a value of $680 million. AutoNation owns and operates 258 new auto franchises, mostly in the Southeast. In contrast to Republic Services, AutoNation’s stock has done nicely this year, increasing 13% as Gates was buying up shares. Another chunk of Gates’s wealth is in cleaning supply outfit Ecolab. His stake here hasn’t changed much over the past year, but is one of his largest known-investments worth $1.8 billion.

All three of these picks trade at what appear to be reasonable values, around 14 times forward earnings for AutoNation and Republic Services. These aren’t screaming deals, but nor are they pricey high-flyers. Amazingly though, Microsoft is more of a deal than these old-industry picks. The software firm Bill built is trading at nine times future earnings. That’s a value play.

Cascade also takes an active role in some of its largest investment. The head of Cascade since 1994, Michael Larson, is a director at several of the companies he has invested in on behalf of Gates, including Republic Services, Autonation, Group Televisa and Ecolab. He also chairs the Board of Trustees for the Western Asset/Claymore Inflation-Linked Securities & Income Fund, another long-time Gates investment.

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I would urge American billionaires to invest their money in bringing back offshored jobs back to USA. Bill has shown the way by investing in AutoNation and EcoLab. It will be great to see Made in USA stamp in products owned by Americans. According to an earlier article of Forbes, even the clothes worn by Americans in Olympics were chinese made.

Bill Gate’s investment in these companies does not produce more jobs. He purchased stock from other shareholders. He didn’t write a check to the actual business that then could use those funds to create new jobs. If he had created a company to compete with lets say – Foxconn – he started manufacturing things – that would be creating jobs. He invested to create wealth!

This is totally off topic as it pertains to this article however I had to reply to tsruda. It is completely understandable why firms are doing business abroad: overhead cost of doing business, workers comp, insurance, legal fees, payroll costs, workers comp claims, lawsuits, warehousing, and taxes have driven US business abroad due to lower costs in locations where many workers have never had the opportunities as we have here in the USA. Workers are eager to make a living and can now get a job to create a better life for their families.

We have gotten sassy, fat, lazy, arrogant, and entitled here. Sad to say, some members of my own family won’t work for minimum wage paying their dues to get ahead. Instead, they sit home playing farmville while enabeling dad pick’s up all their expenses. Pie in the face on us! Sorry, there is always a job to do somewhere, if you are willing to look, take multiple jobs, humble your standards and even sweep floors to survive to get beyond your hell hole. I did it years myself years ago.

Bill Gates earned it, did well creating jobs for many during his working career. Eliminate estate tax, if you already paid tax on money when you earned it … hmmm isn’t this double taxation?? Just put yourself in that position momentarily. Hello …. Congress, are you listening???

Must be nice to have money to invest. I am an independent and a NFCC nationally certified consumer credit/housing counselor for a non-profit. If voters could have sat in my chair for the last 3 years a 100% of them would be voting for Romney this November. It’s really sad the number of people with no jobs and losing their homes.

Gates should be making big investments as an angel and start-up investor, helping brand new businesses, especially those which are likely to create significant numbers of U.S. jobs and those with valuable new technologies.

Maria Schaeffler and her son are one of the wealthiest families in Europe and their portfolio is extensive. Many of their investment funds are into investments for the future as are Bill Gates. Much emphasis is given to philantropic endeavors.

It was interesting to read in Forbes that Bill Gates increased his wealth by $6>7 billion and that the 400 richest Americans increased their wealth by $1.7 trillion or 13% over the last 12-months, but where contrary to this 97% of the world’s population got poorer. The same is the case in the UK. Therefore it has to be asked if these Foundations that these people operate out of are really philanthropic at all and where all this giving is not really giving in the true sense of giving, but a way to increase their personal wealth without incurring any tax. It is debateable as the people behind these vast Foundations get richer every year. Indeed it could be construed that the formula is to create a Foundation so that the taxman cannot get his hands on any part of your wealth, then you reinvest these vast financial resources around the world through employing an array of investors to make as much additional wealth as possible. Nothing wrong in this but it could be seen as a very clever corporate tax dodge where the ultimate owners keep hold of their wealth and pay no tax on the earnings to government, and therefore there is no redistribute of wealth to the less fortunate in society – the vast majority of us. What appears to happen is that Gates and others give around 3% of their wealth (and no more) every year but where the 97%+ that they are left with makes far more billions for them, easily outstripping by far the mere 3% given. Therefore the wealthiest people are far better off financially and their families after them by creating these huge Foundations – little or no tax to pay and most is kept to reinvest to make these people even more richer than before. There is therefore an irony about this giving and philanthropy that is not as straight forward as it seems. In this respect there is more to it than meets the eye and where corporate minds are not programmed to be benevolent in the true sense of the meaning that normal people can understand – the 97% of the world’s populous that now control less than 30% of the world’s wealth. Indeed a mere 2,000 companies last year according to Forbes again, the ‘Global 2000’, controlled 51% of the world’s total economic turnover or $36 trillion in nominal terms. Therefore it appears also that those who run big business never let it go and that can be seen when they form these so-called vast philanthropic Foundations. But also it appears and where I have observed this over the years that these philanthropic multi-billionaires and their Foundations do not give to things that affect their ‘bottom-line’. In this respect I am aware of several examples that can rid the world of major global scourges, such as a cure for Class ‘A’ drugs, the stoppage of future killer pandemics such as avian flu and the vast reduction in HIV/AIDS cases through early testing of new infants. Why don’t they do this? You tell me, but where I believe it is down to financial investment considerations and where highly needed solutions for humanity are not entertained because the present products that try to treat these great diseases and human threats (which have little success) are required to be continually used and thereby continually reap the very high returns for the billionaires like Gates et al personally (through their Foundations of course). It is time therefore in Britain and the West for these people to help their nations who have given them their vast wealth to pay more taxes and their due share to society. Will it happen, probably not as it is as though they think that they can take it with them when they die and their life’s work is just creating personal wealth for themselves and not for a better society?